Year-End Audit Finds TARP Program Effective

By JACKIE CALMES
NYT

WASHINGTON — The independent panel that oversees the government’s financial bailout program concluded in a year-end review that, despite flaws and lingering problems, the program “can be credited with stopping an economic panic.”

The Congressional Oversight Panel, which issued the report, was created in October 2008 by the same law that established the $700 billion Troubled Asset Relief Program. The panel has often been critical of the Treasury Department’s management of the bailout operation, especially at its start in the Bush administration but also under the Obama administration.

In the latest monthly report released on Wednesday, the panel again criticized the Treasury Department under Secretary Timothy F. Geithner for “failure to articulate clear goals or to provide specific measures of success for the program” as it has morphed over time from rescuing financial institutions to propping up securitization markets, auto manufacturers and home mortgages in danger of default. The panel also described the program’s foreclosure mitigation efforts as inadequate.

Its assessment coincides with the Obama administration’s expansion of TARP yet again, to extend credit to small businesses that cannot get loans from still-skittish banks. President Obama highlighted the new mandate in his economic speech on Tuesday, saying that the bailout program should now work for Main Street as well as Wall Street.

(More here.)